Federal Communications Commission (FCC)

The Bells lined up against competitors on a Verizon petition seeking forbearance from Title II and Computer Inquiry rules as they apply to broadband service. The Bells said the broadband marketplace is highly competitive and the regulatory structures they face give cable providers in particular an unfair advantage. Competitors argued that Verizon wants to destroy competition. The 2 sides recently faced off in a similar battle over a BellSouth forbearance petition also before the Commission.

The FCC’s Wireless Broadband Access Task Force advised the FCC to raise the transmission power limits for wireless data providers in rural areas of the U.S. as part of a set of preliminary recommendations following a nearly year-long investigation. The group, formed last May, also said Thurs. that future FCC regulation should be based on a “pro-competitive, innovative” framework with limited barriers at the federal and state levels. It said the FCC should consider classifying wireless broadband as an “information service” and examining whether it constitutes an interstate service not subject to significant state regulation.

The FCC loosened rules governing Ancillary Terrestrial Components (ATC) of mobile satellite service (MSS) systems Thurs., taking reaffirmation of its initial 2003 decision a step further than some in the industry had anticipated. The reconsideration changed L-band interface rules to allow operators more flexibility to design and realize systems according to market needs, and denied requests to revisit its decision not to assign ATC authority by auction.

Permanent rules for 2-way broadband data and communications capabilities for aircraft came a step closer to completion Wed. when the FCC proposed a framework for licensing Aeronautical Mobile Satellite Service (AMSS) systems to communicate with fixed-satellite service (FSS) networks in Ku-band frequencies. In its notice of proposed rulemaking (NPRM), the Commission noted that while AMSS potentially offers passengers the benefits of broadband service on domestic and international trips, some are still concerned about interference. The notice examines frequency allocation in the Ku-band where AMSS systems will operate and seeks comments on steps to protect space research and radio astronomy service sites from AMSS interference. It also proposes licensing rules for AMSS similar to those governing VSATs. Currently, other types of earth station are licensed in 15-year intervals and the Commission believes a similar duration is reasonable for AMSS. The Commission also calls for feedback on the establishment of regulations that could enable foreign-licensed AES terminals to operate in U.S. airspace without causing harmful interference to domestic operations. In April 2001, the International Bureau allowed Boeing to operate up to 800 transmit and receive earth stations aboard aircraft in the Ku-band using the 12 GHz band for space-to-Earth transmissions and the 14 GHz band for Earth-to-space transmissions. In Dec. 2001, that waiver was expanded to include the operation of 2-way mobile earth stations in the 14.0-14.5 GHz band for uplink and the 11.7-12.2 GHz band for downlink. Boeing’s Connexion rolled out satellite-based broadband service on international flights last year and business has been booming. The company has signed agreements with several carriers and expects to generate service revenue of $500,000 per airplane per year and annual revenue of $2 billion. Meanwhile, Aeronautical Radio Inc. (ARINC) wants authority from the Commission to offer a similar service (CD Nov 24 p10). The company has already begun testing its Ku-band AMSS system pursuant to a grant of experimental authority. Under Boeing’s blanket licensing proposal, individual AES stations can operate anywhere in the satellite footprint. The Commission seeks comment on whether AES terminals should be permitted to operate under blanket licensing rules similar to those VSATs and ESVs operate under. The Commission also wants feedback on whether it should provide for the licensing of individual earth stations, using the same technical criteria applied to the antennas in a blanket-licensed AMSS network: “Although we believe that demand for such uses will be limited, we seek comment on whether there are any specific rule provisions that might be required to address such cases.” AMSS operations on board moving aircraft in the FSS spectrum present “novel challenges” to AMSS operators, the Commission said in its NPRM. Regulators hope the record in the proceeding will help determine the effect of authorizing AES terminals and aid development of any future rules. A Boeing spokeswoman said the policy would provide for “more certainty in the regulatory environment” and the key issues in the NPRM are in line with the company’s recommendations. Boeing worked with the Commission to develop the framework and said officials there have largely been responsible to their proposals. Deadline for comments is 75 days after Federal Register publication; replies are due 30 days later.

SAN FRANCISCO -- Business witnesses at a Cal. PUC broadband hearing said govt. should get out of their way unless it’s helping industry. Advocacy groups, however, said underserved people needed govt. rules and material help to enter the digital world. They testified at an all-day session (CD Feb 9 p3) intended to move a report on broadband adoption, obstacles and solutions from a draft to a final product that the commission could vote as early as March 17 to send the governor and legislature under a state statutory mandate.

OPASTCO urged the FCC to adopt “a strong set of standardized minimum criteria” for use by state commissions and the FCC in determining whether rural competitors are qualified for designation as eligible telecom carriers (ETCs). ETC status enables a carrier to receive high-cost universal service funding. OPASTCO in a Feb. 1 ex parte letter also urged the agency to make sure its bureaus “consistently and rigorously” apply whatever guidelines are adopted. The association reminded the FCC that in the Va. Cellular decision it said a more stringent public interest analysis was needed for ETC designations. In that decision, the FCC adopted an interim public interest analysis framework pending further action, OPASTCO said. However, OPASTCO complained, the Wireline Bureau didn’t “carefully apply” that interim framework when it designated Nextel Partners as an ETC in 7 states in August: “A series of ex parte communications from TDS Telecom indicate that Nextel Partners’ own coverage maps do not demonstrate any significant level of service in most of the TDS Telecom service areas in which Nextel Partners was designated as an ETC… If the FCC’s own bureaus cannot adhere to an adopted framework for conducting public interest analyses, how can it reasonably expect state commissions to follow any federal guidelines on minimum ETC eligibility criteria that are adopted?”

SBC’s merger with AT&T undoubtedly will require some divestitures, analysts and others predicted Mon. as the companies announced the $16 billion transaction. SBC Chmn. Edward Whitacre told the news media he didn’t expect regulators to order spinoffs but others say such action may be inevitable, with reviews expected by state regulators, the FCC, the Dept. of Justice and possibly international regulatory bodies. The merger will eventually gain antitrust and regulatory clearance “but could be subject to significant divestitures, particularly in SBC’s region,” Legg Mason predicted in a report Mon. Regulatory attorney Andrew Lipman said there’s a “high probability” of regulators requiring “spinoffs and surgery.”

FCC Comr. Martin appears to be the leading candidate for the next FCC chairman now that Chmn. Powell has announced his departure (CD Jan 24 p1), according to several sources inside and outside of the FCC. They say Martin is well connected to the White House, possibly more so even than Powell, and would be an “easy” choice because he could move quickly into his new spot after only a perfunctory Hill hearing. As a comr., Martin could be designated as chmn. without having to be confirmed, which would prevent giving Democrats a platform on such political hot potatoes as media consolidation. “The smart money is on Martin; it’s the path of least resistence,” said a former FCC official. “There’s no clear leader but Martin is the easiest move if the President wants to avoid a long drawn-out battle,” said an industry lobbyist.

The immediate big issue confronting the White House with the pending departure of Chmn. Powell is who will be the next chairman. A few front runners were mentioned by several sources, most prominently Comr. Martin, former Tex. PUC Chmn. Becky Klein and NTIA Dir. Michael Gallagher. All 3 make little secret of their desire to head the FCC.

Northpoint Technology appeared to score some points Fri. in oral arguments before the Court of Appeals, D.C., in its battle with the FCC over a narrow but potentially significant spectrum issue. Judges Harry Edwards and Raymond Randolph appeared skeptical at times of the FCC’s arguments on why it ruled that spectrum sought by Northpoint to offer DBS should instead be offered at auction - a step subsequently taken by the FCC.